Ford shares down after Europe loss

FORD is posting record profits in North America but is not doing so well in Europe.

Dee-Ann Durbin

AAPJanuary 31, 20137:38am

FORD is posting record profits in North America but it's not enough to quell unease about the company's prospects elsewhere.

Ford's shares dropped nearly 5 per cent after the company said it expects to lose more money in Europe this year and break even in Asia and South America. The final straw for investors: Ford said sales will increase next year but profits should remain about the same, dashing hopes margins will continue to grow.

The outlook "brings overly optimistic investor expectations back in check," Barclays analyst Brian Johnson said in a note to investors.

The No. 2 U.S. automaker posted a record pretax profit of $US8.3 billion in North America in 2012, the result of a 6-year turnaround orchestrated by CEO Alan Mulally. It's reaching back into that playbook to fix its operations in Europe, where it lost $1.75 billion. The European restructuring plan announced in October was one reason Ford's stock has been trading at levels not seen since 2011.

However, Ford forecast a loss of $2 billion in Europe and company executives and Wall Street analysts reminded investors improving the performance outside of North America - in both Europe and Asia - will take time.

"These things don't happen in three months, six months or even a year. But we will get there," Chief Financial Officer Bob Shanks said in a phone call with investors and media.

The outlook overshadowed another strong performance in North America last year. Ford's F-Series pickups retained their decades-long place as the best-selling vehicles in the US, while sales of the Focus small car jumped 40 per cent.